The Table Shows Labor Demand Data on the Left and Labor

question 126

Multiple Choice

The table shows labor demand data on the left and labor supply data on the right. We can conclude that

• A)the product market is imperfectly competitive and the labor market is monopsonistic.
• B)the labor market is monopsonistic, but the product market is purely competitive.
• C)both the labor and product markets are purely competitive.
• D)the labor market is purely competitive, but the product market is monopsonistic.

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Definitions:

Reserve Requirement

The minimum amount of reserves that banks must hold, either in their vaults or with the central bank, as a proportion of deposits.

Excess Reserves

The surplus funds that banks hold over the required minimum set by the central bank to meet unexpected withdrawals.

Deposits

Funds stored in a bank or similar entity for security purposes that have the potential to accrue interest as time passes.

Reserve Requirement

The minimum amount of funds that a bank must hold in reserve against deposit liabilities, set by the central bank.